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DISH Network (DISH) Q2 Earnings Miss, Revenues Down Y/Y
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DISH Network reported second-quarter 2019 earnings of 60 cents per share that missed the Zacks Consensus Estimate by 6 cents and declined 27.7% year over year.
Revenues declined 7.2% year over year to $3.21 billion but surpassed the consensus mark of $3.14 billion.
The United States revenues declined 7.3% year over year to $3.20 billion. Canada and Mexico revenues increased 7.3% from the year-ago quarter to $10.8 million.
DISH exited the reported quarter with 9.560 million DISH TV and 2.472 million Sling TV subscribers. Total Pay-TV subscribers were 12.032 million.
DISH Network Corporation Price, Consensus and EPS Surprise
On Jul 26, 2019, DISH announced that it will enter the U.S. wireless market as the fourth, nationwide, facilities-based network competitor.
The company has inked agreements with the Antitrust Division of the U.S. Department of Justice (DOJ), T-Mobile U.S., Inc. and Sprint Corporation to complete this transaction.
Moreover, per the latest agreement, Jun 14, 2023, is now DISH’s deadline to provide 70% of the nation's population access to its 5G broadband network.
Additionally, following completion of the merger between Sprint and T-Mobile, DISH will buy Sprint's prepaid businesses and customers, including Boost Mobile, Virgin Mobile and the Sprint-branded prepaid service.
The company will also acquire 14 MHz of Sprint's nationwide 800 MHz spectrum.
Segment Details
Subscriber-related revenues (98.5% of revenues) declined 7.5% from the year-ago quarter to $3.16 billion. Equipment sales and other revenues increased 10% to $39.4 million.
Pay-TV video and related revenues fell 7% to $3.12 billion. Broadband revenues plunged 32.5% year over year to $45.5 million.
Pay-TV ARPU increased 0.9% year over year to $86.34, driven by DISH TV programming package price increases in 2018 and the first quarter of 2019, and higher revenues from advertising services.
Pay-TV subscribers declined approximately 31K compared with 151K subscribers lost in the year-ago quarter. Moreover, the churn rate was 1.48% compared with 1.46% in the year-ago quarter.
DISH added approximately 48,000 net Sling TV subscribers compared with roughly 41,000 added in the year-ago quarter. This increase was primarily driven by higher Sling TV subscriber activations.
Operating Details
In the second quarter, subscriber-related expenses declined 7.3% year over year to $2 billion. As percentage of revenues, subscriber-related expenses decreased 10 basis points (bps) on a year-over-year basis to 62.3%.
Total subscriber acquisition costs (SACs) increased 29.9% from the year-ago quarter to $238.1 million. As percentage of revenues, SACs expanded 210 bps to 7.4%.
DISH TV SAC was $786, up 3% year over year primarily due to increase in advertising and hardware costs.
EBITDA decreased 24.9% year over year to $559.7 million. EBITDA margin contracted 410 bps on a year-over-year basis to 17.4%.
Operating income fell 24.8% year over year to $430.7 million. Operating margin contracted 310 bps to 13.4%.
Balance Sheet
As of Jun 30, 2019, cash, cash equivalents and current marketable investment securities were $2.73 billion compared with $2.39 billion as of Mar 31, 2019.
While EA is set to report on Jul 30, Liberty Global and Lionsgate are scheduled to report on Aug 7 and 8, respectively.
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DISH Network (DISH) Q2 Earnings Miss, Revenues Down Y/Y
DISH Network reported second-quarter 2019 earnings of 60 cents per share that missed the Zacks Consensus Estimate by 6 cents and declined 27.7% year over year.
Revenues declined 7.2% year over year to $3.21 billion but surpassed the consensus mark of $3.14 billion.
The United States revenues declined 7.3% year over year to $3.20 billion. Canada and Mexico revenues increased 7.3% from the year-ago quarter to $10.8 million.
DISH exited the reported quarter with 9.560 million DISH TV and 2.472 million Sling TV subscribers. Total Pay-TV subscribers were 12.032 million.
DISH Network Corporation Price, Consensus and EPS Surprise
DISH Network Corporation price-consensus-eps-surprise-chart | DISH Network Corporation Quote
Wireless Details
On Jul 26, 2019, DISH announced that it will enter the U.S. wireless market as the fourth, nationwide, facilities-based network competitor.
The company has inked agreements with the Antitrust Division of the U.S. Department of Justice (DOJ), T-Mobile U.S., Inc. and Sprint Corporation to complete this transaction.
Moreover, per the latest agreement, Jun 14, 2023, is now DISH’s deadline to provide 70% of the nation's population access to its 5G broadband network.
Additionally, following completion of the merger between Sprint and T-Mobile, DISH will buy Sprint's prepaid businesses and customers, including Boost Mobile, Virgin Mobile and the Sprint-branded prepaid service.
The company will also acquire 14 MHz of Sprint's nationwide 800 MHz spectrum.
Segment Details
Subscriber-related revenues (98.5% of revenues) declined 7.5% from the year-ago quarter to $3.16 billion. Equipment sales and other revenues increased 10% to $39.4 million.
Pay-TV video and related revenues fell 7% to $3.12 billion. Broadband revenues plunged 32.5% year over year to $45.5 million.
Pay-TV ARPU increased 0.9% year over year to $86.34, driven by DISH TV programming package price increases in 2018 and the first quarter of 2019, and higher revenues from advertising services.
Pay-TV subscribers declined approximately 31K compared with 151K subscribers lost in the year-ago quarter. Moreover, the churn rate was 1.48% compared with 1.46% in the year-ago quarter.
DISH added approximately 48,000 net Sling TV subscribers compared with roughly 41,000 added in the year-ago quarter. This increase was primarily driven by higher Sling TV subscriber activations.
Operating Details
In the second quarter, subscriber-related expenses declined 7.3% year over year to $2 billion. As percentage of revenues, subscriber-related expenses decreased 10 basis points (bps) on a year-over-year basis to 62.3%.
Total subscriber acquisition costs (SACs) increased 29.9% from the year-ago quarter to $238.1 million. As percentage of revenues, SACs expanded 210 bps to 7.4%.
DISH TV SAC was $786, up 3% year over year primarily due to increase in advertising and hardware costs.
EBITDA decreased 24.9% year over year to $559.7 million. EBITDA margin contracted 410 bps on a year-over-year basis to 17.4%.
Operating income fell 24.8% year over year to $430.7 million. Operating margin contracted 310 bps to 13.4%.
Balance Sheet
As of Jun 30, 2019, cash, cash equivalents and current marketable investment securities were $2.73 billion compared with $2.39 billion as of Mar 31, 2019.
Zacks Rank and Stocks to Consider
DISH currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader consumer discretionary sector are Electronic Arts (EA - Free Report) , Liberty Global (LBTYA - Free Report) and Lionsgate (LGF.A - Free Report) , each carrying a Zacks #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
While EA is set to report on Jul 30, Liberty Global and Lionsgate are scheduled to report on Aug 7 and 8, respectively.
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Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
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